Speaker 1: Bloomberg Audio Studios, podcasts, radio news.
Speaker 2: I'm here with the Ambassador Jamison Greer here on the
Speaker 2: sidelines at the Aspense Security Forum.
Speaker 3: Great to have you with us.
Speaker 2: And you were just on a panel and you said
Speaker 2: you have an aversion to making news.
Speaker 3: I'm going to try.
Speaker 2: Nonetheless, I think there are a lot of folks wondering
Speaker 2: about Brazil, in particular, seen as this test case for
Speaker 2: the Section three oh one tariffs statutory deadline is today.
Speaker 2: Anything that you can say about the process and where
Speaker 2: it stands and what we can.
Speaker 3: Expect it's today.
Speaker 1: So our Section three oh one investigations, they are legal investigations.
Speaker 1: We have two sets of hearings, we do two sets
Speaker 1: of public comments, and we're focused on unfair trading practices
Speaker 1: by Brazil.
Speaker 3: So we have to have a legal basis to do this.
Speaker 1: And there are all kinds of things that Brazil has
Speaker 1: been doing. They've been censoring our digital tech companies. They've
Speaker 1: been restricting our access for ethanol to their market. They've
Speaker 1: been actually engaging in illegal deforestation in the Amazon, which
Speaker 1: gives them a leg up on all the agg where
Speaker 1: they displace our ag exports to third countries. So there
Speaker 1: are a lot of things like this that have been
Speaker 1: problem for a long time with Brazil. So we've been
Speaker 1: investigating this. Today we'll announce our final action. I had
Speaker 1: a conversation, a video conversation with my counterpartn Brazil last night,
Speaker 1: very cordial. We've had intensive negotiations with them. I think
Speaker 1: there's still a lot of gaps between us, so we
Speaker 1: probably have to have some kind of action, but then
Speaker 1: continued discussions.
Speaker 2: I think expectation twenty five percent in line with what
Speaker 2: you're thinking in terms of the range.
Speaker 1: Well, this is what was proposed by my office at
Speaker 1: the presence direction, so this is probably what we're looking at. Again,
Speaker 1: I don't want to get ahead of the president. He's
Speaker 1: signing something today. I just got off the phone with
Speaker 1: him and so we'll have more details to come. But
Speaker 1: again I just want to emphasize these are unfair trading
Speaker 1: practices that Brazil has had in place against American exporters
Speaker 1: and workers for many years. The President is trying to
Speaker 1: resolve these and we're doing it by negotiation. Where we
Speaker 1: need to use leverage of tariffs, that's what we're allowed
Speaker 1: to do with Section three oh one. We'll do that
Speaker 1: where it's necessary.
Speaker 2: Ask you about Vietnam as well. All I understand representatives
Speaker 2: of Vietnam have been in Washington meeting with your staff.
Speaker 3: Any update that you can give us.
Speaker 2: On the status of those negotiations.
Speaker 1: Yes, So we have Vietnamese officials in Washington this week
Speaker 1: negotiating with all of the trade deals we've done over
Speaker 1: the past year and a half, all of them have
Speaker 1: had some core issues. Obviously tariffs, we want other countries
Speaker 1: to take down their tariffs, non tariff barriers where they
Speaker 1: restrict US exports of goods and services. Also things like
Speaker 1: economic security where if we're going to be shipping them
Speaker 1: some of our high tech equipment, they need to align
Speaker 1: with us on export controls and other things. So this
Speaker 1: is something we expect from the Vietnamese. And then there
Speaker 1: are things like just basic standards of intellectual property and
Speaker 1: other things. The type of things that the rules that
Speaker 1: our companies abide by we want them to do so
Speaker 1: as well. So I have a separate investigation with Vietnam
Speaker 1: involving intellectual property because they've been a bad actor in
Speaker 1: this space. So these are the types of things intellectual property,
Speaker 1: economic security, where we still have open areas of discussion.
Speaker 2: Switzerland's top trade diplomatical Bloomberg, there's a good chance they'll
Speaker 2: get to a fifteen percent deal and stable. Can you
Speaker 2: confirm that negotiations with Switzerland are going well.
Speaker 3: Well, I know that's what they want.
Speaker 1: I know that is the substance of a framework agreement
Speaker 1: we agreed to a few months ago.
Speaker 3: One interesting thing with Switzerland.
Speaker 1: We've been very concerned with our trade deafs with Switzerland,
Speaker 1: but over the past six to seven months, the United
Speaker 1: States is now in surplus with Switzerland in goods. So
Speaker 1: that's a really positive development. The Swiss are investing here
Speaker 1: in America. In fact, this week I'm going to visit
Speaker 1: a plant in Utah where they are producing railway equipment.
Speaker 1: It's a Swiss company. They're coming here that bringing their
Speaker 1: apprenticeship program. So the Swiss are doing a lot of
Speaker 1: the things they need to do to get right with
Speaker 1: the US. Negotiations are still ongoing, so I can't guarantee anything,
Speaker 1: but there's positive direction there.
Speaker 2: Ask you about the sanctions bill newly elevated after the
Speaker 2: passing of Senator Lindsey Graham. Senator Richard Blumenthal said, you've
Speaker 2: been involved in conversations about that is it in a
Speaker 2: place now that the White House that you and the
Speaker 2: White House are happy with.
Speaker 1: So there are a lot of elements to this bill.
Speaker 1: There's a teriff element, there's a sanctions element, all of
Speaker 1: which are designed to give the President discretion to deploy
Speaker 1: pressure on Russia and those who are supporting Russia. So
Speaker 1: we've worked very constructively with the Senate on this. There
Speaker 1: are a lot of good things to be said about it.
Speaker 1: I just spoke with the President about it as well,
Speaker 1: so I think there's an openness there. I think we'll
Speaker 1: see within the next couple of days, you know, final
Speaker 1: views from the President on whether he wants to be supportive.
Speaker 1: I think that we have it in a pretty good place.
Speaker 1: I think it's meaningful that this is something that Senator
Speaker 1: Graham and I and Senator Blumenthal and others were working
Speaker 1: on up until his last days, and that's meaningful as well.
Speaker 2: It would give the present the latitude to impose TARRASF
Speaker 2: up to one hundred percent, as I understand it, on
Speaker 2: the largest importers of Russian oil. Any indication from him
Speaker 2: if he's prepared to do that should this be past, well.
Speaker 1: I mean, I think you know, when I talk to
Speaker 1: the President about this kind of issue. He wants to
Speaker 1: be careful about the way he deploys this kind of leverage.
Speaker 1: Geopolitics are very fragile, and this is something whether it's
Speaker 1: a terrif action or sanctions action or anything, something that
Speaker 1: the President thinks about very carefully.
Speaker 3: He certainly talks to me.
Speaker 1: He talks to Secretary Best and Secretary Rubio, Secretary Lennik, he.
Speaker 3: Talks to everybody.
Speaker 1: He talks to people outside the government wants to He
Speaker 1: wants to hit the right spot of putting pressure on
Speaker 1: countries and putting pressure on Russia without creating more conflict
Speaker 1: or reducing the likelihood of a peace deal.
Speaker 2: The Section one twenty two tariffs set to expire in
Speaker 2: just a couple of days, really few days from now
Speaker 2: July twenty July twenty fourth, all but certain that the
Speaker 2: three one tariffs wund affect after that. Are we looking
Speaker 2: at perhaps a lapse kind of in coverage.
Speaker 1: I mean, the reality is the Section three oh one
Speaker 1: investigations I'm doing, where we've proposed some tariffs, they're on
Speaker 1: their own track. We're moving quickly, deliberately because we want
Speaker 1: to resolve the unfair trading practices that we're targeting with
Speaker 1: these investigations. So we're going to do them as soon
Speaker 1: as we can to get at these practices, you know,
Speaker 1: whether they're you know, day before, day of, day after,
Speaker 1: that's less important to us than making sure we're addressing
Speaker 1: these unfair trading practices and getting the leverage in place
Speaker 1: we need to resolve them.
Speaker 2: Do you have a timetable for one, you're going to
Speaker 2: bring that report to the President when you might see
Speaker 2: them enacted.
Speaker 1: We have a couple, right, so we have a section
Speaker 1: three oh one on forced labor, targeting countries who don't
Speaker 1: ban the import of forced labor goods. We do in America,
Speaker 1: other countries don't. Some have a law, but they don't
Speaker 1: necessarily enforce it. So we already have our report out
Speaker 1: on that, and so we can take action I think
Speaker 1: fairly quickly on that within the next few weeks. We
Speaker 1: have another investigations targeting a more compact group of countries
Speaker 1: on structural excess capacity. These are countries who have a
Speaker 1: typically have a big trade deficit with the world or
Speaker 1: a big sorry, a big trade surplus with the world,
Speaker 1: or a big trade surplus with US, or even if
Speaker 1: they don't they may have practices that generate factories or
Speaker 1: production that are totally out of whack with global demand.
Speaker 3: So this is a quite intense project.
Speaker 1: I have dozens and dozens of attorneys and policy makers
Speaker 1: working on this to really examine all of these practices.
Speaker 1: So it takes a little longer time than doing this
Speaker 1: forced labor one, which is a little bit of a
Speaker 1: binary where you're looking at you know, what do they
Speaker 1: have in place and are they enforcing it?
Speaker 3: This is more complex, does not.
Speaker 2: Explain the delay entirely or how long it's taking. Or
Speaker 2: there's been reports that maybe China, that China issue is
Speaker 2: complicating it more than it is with the others.
Speaker 1: No, no, I don't think that's the case at all, right,
Speaker 1: I mean China is included in this Structural Excess Capacity
Speaker 1: Section three oh one. The reality is it's a more
Speaker 1: complex investigation, and we have to make sure that we
Speaker 1: are hitting our milestones. You know, we've received a lot
Speaker 1: of comments from the public. We have to analyze those,
Speaker 1: we have to incorporate them into any responsive action we
Speaker 1: might take. So we're trying to make sure that we're
Speaker 1: we're actually living up to the letter of the law
Speaker 1: and the spirit of the law. We want to make
Speaker 1: sure that we're targeting these you know, these unfair trading
Speaker 1: practices that have led to frankly offshoring in the US
Speaker 1: and an inability to build new factories at times when
Speaker 1: you have other countries that are building factories or they're
Speaker 1: depressing demand in their own country. This is not how
Speaker 1: market economics are supposed to work, and it creates a
Speaker 1: situation where there's not enough incentive to build a new
Speaker 1: factory in America or to employ American workers because we
Speaker 1: have over capacity elsewhere. So we want to make sure
Speaker 1: that that capacity is restrained, restricted, or that we mitigate
Speaker 1: it somehow in our own economy so we can have
Speaker 1: market incentives to build here and to make here.
Speaker 2: I want to ask you about rare earths, and I
Speaker 2: wonder how you would assess China's performance when it comes
Speaker 2: to rare earths and as we get close to October,
Speaker 2: do you anticipate that that agreement will be renewed and
Speaker 2: due course.
Speaker 1: So China's compliance with the rare earth elements of our agreements,
Speaker 1: it's not perfect. I think everyone knows that you can
Speaker 1: read that in the paper that being said, we are
Speaker 1: getting a flow of rare earth. We don't have factory
Speaker 1: shutting down because they don't have it. But again, we
Speaker 1: really want to be in a position where we were
Speaker 1: in twenty twenty four and twenty twenty three in Prisident
Speaker 1: Trump's first term, where we had a regular flow of
Speaker 1: rare earth's. We also know that the Chinese they use
Speaker 1: rare earth for economic coercion. They did it in twenty
Speaker 1: ten and twenty eleven, they're doing it now, so it's
Speaker 1: not necessarily surprising.
Speaker 3: But we're continuing, you know, to have some flow.
Speaker 1: And where we have gaps, where we have problems the
Speaker 1: sector of the treasure and I, we work with our
Speaker 1: counterpart in China to try to loosen that flow up.
Speaker 1: Sometimes we're more successful than others. One important thing is
Speaker 1: we're moving forward in the US on rare earth production.
Speaker 1: One of the things I'm doing on my trip out
Speaker 1: west here, I'm going to Utah to visit facility where
Speaker 1: we've already they've discovered rare earth in the Utah Desert
Speaker 1: and they're refining them and further manufacturing them at a
Speaker 1: facility in Utah, which is a great development for US
Speaker 1: national and economic security.
Speaker 2: You've got rare earths there's huge pharmaceutical dependence as well,
Speaker 2: and I wonder how you're thinking about that, the way
Speaker 2: that you can kind of curb our reliance on Chinese
Speaker 2: pharmaceuticals and ingredients.
Speaker 3: We think about this a lot.
Speaker 1: This is really critical because at the end of the day,
Speaker 1: if somehow you lose access to Chinese inputs, it can
Speaker 1: be a huge challenge for our own manufacturing base. And
Speaker 1: some people will say, well, what about India, Fine, but
Speaker 1: a lot of the inputs that India uses also come
Speaker 1: from China. One great thing that we're seeing as we
Speaker 1: try to encourage companies to reshore is we actually have
Speaker 1: commitments from seventeen pharmaceutical companies, you know, the most the
Speaker 1: largest and the most major pharmaceutical companies, not only to
Speaker 1: lower prices of medication here in the US pharmaceutical prices
Speaker 1: have gone down by two point five percent, but they've
Speaker 1: also agreed to reshore here and to manufacture here. And
Speaker 1: so we have companies like Eli Lilly and Novardes and
Speaker 1: others actually pouring concrete and superstructures going up in new
Speaker 1: facilities in North Carolina and Indiana and southern California. So
Speaker 1: this actually, for me, has been a really bright spot
Speaker 1: of our efforts to reshot critical production in America.
Speaker 2: In the trade REPS glossary, transhipments is a word. Yes,
Speaker 2: I'm wondering how you are thinking about monitoring and blocking
Speaker 2: tranship and when it comes to China.
Speaker 1: So it is a gloss it is a word in
Speaker 1: our glossary. But it can mean different things. Right, there's
Speaker 1: kind of like your pure illegal transhipment where something's made
Speaker 1: in China, they send it to Vietnam and they put
Speaker 1: a made in Vietnam sticker and send it over. It's
Speaker 1: just illegal, right, and that's on Customs and Border Protection
Speaker 1: to enforce that right. So do investigations to identify areas
Speaker 1: of fraud and go after it, and we and we're
Speaker 1: doing that. A day or two ago we had a
Speaker 1: big announcement with DOJ teaming up with CPP. They've alread
Speaker 1: found a billion dollars in customs fraud and some of
Speaker 1: that is transhipment. And then you have another issue where
Speaker 1: you have you know country it's often Asian inputs, China, Vietnam.
Speaker 1: They go to a third country, maybe Mexico, and they
Speaker 1: do just enough work where they can legally say this
Speaker 1: is actually from Mexico. So maybe we should get a
Speaker 1: better terrif rate than if it were from China. That's
Speaker 1: an issue, and that's a problem with Mexico right now
Speaker 1: for example, and some of our discussions we're talking about
Speaker 1: rules of origin and saying, if you want to get
Speaker 1: a better deal bringing something in from Mexico or name
Speaker 1: your country, you have to make sure it's actually has
Speaker 1: US content. You have to make sure it actually has
Speaker 1: you know, Mexican content or whatever it is, and you
Speaker 1: have to have that as high as possible to protect
Speaker 1: against this other type of transhipment, which is a little
Speaker 1: more difficult to detect.
Speaker 2: Last question here, and you're gonna have to tell me
Speaker 2: how you trea USh your schedule and look at all
Speaker 2: of these deadlines. But yeah, you know, there's a long
Speaker 2: way to go until this meeting in septime when the
Speaker 2: Chinese president comes to the United States. But let me
Speaker 2: ask you lastly sort of how you're thinking about that.
Speaker 2: You were so integral to the conversations that took place
Speaker 2: in Beijing. What are you expecting deliverables wise to come
Speaker 2: out of that meeting in Washington in a couple months.
Speaker 1: Well, the number one deliverable we always have between President
Speaker 1: Trump and President She is to continue the stability of
Speaker 1: the relationship. Both of these leaders are very committed to
Speaker 1: having a strong and solid personal relationship. Now that doesn't
Speaker 1: mean we don't have issues in the broader relationship.
Speaker 3: Obviously we do.
Speaker 1: China is a big challenge for the US in a
Speaker 1: lot of ways, but we want to make sure we're
Speaker 1: delivering stability. There's never been a situation where the US
Speaker 1: side or even the Chinese side, has gone out and
Speaker 1: said everyone should expect a comprehensive.
Speaker 3: Agreement that resolves all issues.
Speaker 1: Like. No one's ever promised that, so that's not what
Speaker 1: we expect. We will have an opportunity to take stock
Speaker 1: of Chinese commitments with respective purchases of soybeans and other
Speaker 1: agricultural products. Will take stock on the rare of issues
Speaker 1: we decided, so I think it'll be a moment for
Speaker 1: stock taking, confirming the relationship, making sure that China is
Speaker 1: complying with what it's agreed to do. That's really what
Speaker 1: we're looking forward to in this meeting.